Blue Sky Laws

Blue sky laws are state-level securities regulations that require companies offering securities to register the offering and disclose meaningful information, aimed at preventing fraudulent investment schemes. The name comes from early 20th-century concern about promoters selling securities backed by nothing more than "the blue sky."

Blue sky laws operate alongside federal securities law rather than replacing it; an offering typically needs to satisfy both. They matter most for smaller, less liquid offerings that fall outside standard national exchange listing requirements.